Start-Up Strategies That Are Good for Investment

Working in the start-up sector is not easy, and when it comes to finding a potential investor for your new projects, it can be even harder.
potential investor

Working in the start-up sector is not easy, and when it comes to finding investment for your new projects, it can be even harder. Despite the fact that the US Internet venture capital sector is believed to be worth over $10 billion US dollars, it’s also the case that many entrepreneurs struggle to get to a point where they can successfully attract inflowing investment for their idea – often, it seems, due to competition.

But there are some ways to do it. Often the most successful stem from opting for a strong, profit-friendly strategy from day one. Whether you choose to bootstrap your business to ensure that its operating costs are low from the very start or you base your original idea around comprehensive market research, it certainly is possible to get ahead of the game and maximize your chances of being the lucky one who receives the investment when the venture capitalists and angels do their next round. This article will guide you through your options.

Being Prudent with Cash

From an investor’s point of view, there’s nothing quite like a healthy set of revenue and spending statistics to persuade them that a start-up is worth taking a punt on. However, that doesn’t necessarily mean that your start-up has to be showing numerous orders and cash flowing through the door. It could also be demonstrated by showing that you’re prudent with the income you do have, and investors including Bill Malloy – that focus in particular on technology, a sector which has something of a reputation for occasional overspending – are likely to be impressed if you can show prudence in this regard.

If you can demonstrate that you built your start-up from the ground up by “bootstrapping”, or spending only when absolutely necessary, you’ll get a plus point. Take, for example, the issue of staffing. A bloated and generalized workforce is unlikely to go down well with a potential investor, especially if that workforce then didn’t deliver. But if you can show that you made one judicious hire (a coder, perhaps, or a developer) who really added value and then show that you did all the other work yourself, a potential investor is likely to nod with approval. 

A Clear Case

Alternatively, it may be worth doing lots of market research before pressing ahead with your idea. The point here is twofold: first of all, it means that you have as much information as possible about your industry and your firm’s place in it before you start work on your project. But it also has a longer-term benefit, too: it will make it much easier to create a convincing pitch deck for a potential investor further down the line, and it will reassure them that you have at least done your homework.

Instinctive Decisions

The reality of the situation, however, is that even some firms with the strongest possible cases and the best possible balance of investment and cash-saving will not be able to get ahead in the competitive investment sphere. In that case, it may in some cases come down to a more instinctive decision. While it may seem surprising to a newbie entrepreneur that significant decisions about large amounts of investment cash could be decided on a whim like this, it’s actually more common than it might seem.

If you’re able to build a good rapport and connection with a potential investor, this could play a role in swinging the decision in your favor. Or if your product or service overlaps with a personal interest of the investor, that could also work to your advantage. It may not be possible to systematize it as a strategy – although it is often possible to use this in your favour by tailoring your pitch to each individual investor in the hope that you get in their good books.

If you’re an entrepreneur on the hunt for investment, you’ll know just how tough the search for the competitive, elusive commitment from a VC can be. But as this blog post has demonstrated, there are some ways in which you can overcome the worst start-up investment gridlock and get the funding that your firm deserves. By showing yourself to be financially prudent and by incorporating rigorous research into your idea, you’ll be able to create the best possible case for the investor to choose you. And if all else fails, don’t worry, there’s still the outside possibility that you will stumble across an investor who has a positive instinctive feeling about your business, and who might be willing to take a chance on you.

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